Statutes Amendment And Repeal (Fair Trading) Bill

This speech is to indicate that the liberal party will be supporting the second reading of the Statutes Amendment And Repeal (Fair Trading) Bill.

Adjourned debate on second reading.

(Continued from 26 March 2009. Page 1807.)

The Hon. J.M.A. LENSINK (12:33): I rise to indicate the Liberal Party's position in relation to most of the aspects of this bill. Some aspects of the bill have received more attention than others, and I want to focus initially on the issue of the enforcement powers of the Commissioner for Consumer Affairs. In terms of the representations we have received, this issue has not received much attention, and I want to briefly touch on it before we go on to the more contentious issues.

In large part, some sections of this bill are related to the strengthening of the powers of the Commissioner for Consumer Affairs, and this arises from a review of the Fair Trade Act. I have a copy of the report, which was released in April last year. Can the minister, at some stage in her response, comment on which provisions included in that consultation paper were not proceeded with and why?

Included in the new powers is the provision that the commissioner will have the power to require traders to participate in conciliation where the value of the goods is up to $1,000, which I think is to be commended; and that, if conciliation is not reached, this agreement will be enforceable in the Magistrates Court, which is similar to some provisions in what is termed colloquially the Small Claims Court, which is based in the Magistrates Court. I think conciliation is often preferable, and it is certainly one means which ought to be available to consumers to obtain some sort of redress. The definition of 'document' will be expanded to include electronic records; I think that is a bit of a no-brainer.

Powers of authorised officers will be increased to include the retention and copying of documents. My question on this matter is whether the government anticipates that additional officers will be required for any aspect in relation to this and, given that we are strengthening the powers, whether the government expects to be involved in more complaints matters and whether more resources and officers will be appointed to assist with those aims.

The current offence of providing false information will be extended to include misleading information which is knowingly provided, and a new offence is being created making it an offence to threaten, intimidate or coerce a potential witness and, again, that is a no-brainer. New part 3A will enable the commissioner to have power to suspend the licence of certain licensed traders for up to six months and, on my reading of the bill, that is on three conditions which must all be fulfilled: that the trader has or is engaged in conduct which constitutes grounds for disciplinary action; that the behaviour is likely to continue; and, finally, that there is a danger that consumers may suffer significant harm, significant loss or damage. These powers will apply to building work contractors, plumbers, gas fitters, electricians, licensed dealers under the Second-hand Vehicle Dealers Act and travel agents. Again, this is a positive move.

There has been some criticism that the Office of Consumer and Business Affairs does not have sufficient powers to assist consumers who have genuine grievances. Furthermore, the commissioner will be able to note on an existing licence certain events such as whether the licence holder is insolvent, and those sorts of things are very helpful for consumers. There are also increases in the existing penalties, which I support, in that I think it is curious that penalties in all of our statutes do not keep pace with inflation, and it is only when these matters are reviewed that the penalties are also reviewed.

On that matter, I ask where the penalties end up: whether that is general revenue, whether there are any hypothecated funds or whether those funds are returned to OCBA or the like. I turn now to the other aspects of the bill which relate to recreational service providers. A number of us have been lobbied excessively by a number of concerned recreational service providers in relation to their ability to obtain public liability insurance. I state at the outset that the Liberal Party believes that the most important principle is to find a balance between the rights and responsibilities of consumers, potentially injured parties and recreational service providers and in so doing be able to provide public liability at the most affordable level so that those activities continue.

I think we universally agree that we wish for recreational service providers to be able to obtain public liability insurance. They provide a very important role in our community, and their services are greatly appreciated.

In some ways, these provisions have been drafted in order to address the matter, which was the failure of the current regime—which is the Recreational Services (Limitation of Liability) Act 2002, which is clearly unworkable—and we have been advised that recreational services providers do not wish to continue under this regime. In fact, it has been a matter of where codes were required to be registered. That was so unworkable that only one code has been registered, which I understand is one of the pony activities.

I think it is fair to say that, because this debate has a great deal to do with the common law matter of torts, which is certainly not something in which I am well educated (I did only one subject of law as part of a master of bugger all), I will defer to our learned colleague the Hon. Robert Lawson with respect to some of those aspects, because they involve significant amounts of common law development of torts, and what we have here are statutory provisions that are attempting to intersect with those. Therefore, it has been a very complicated issue, I think, for anyone who has attempted to decipher exactly the right way for us to go on this matter.

I will now turn to the issues that were raised with us by recreational services providers. I (and I believe a number of other members) have met with Horse SA and two individuals, Sarita Stratton and Matthew Slater, who were very concerned about some of the existing provisions. I would like to outline some of the concerns that have been raised with us. They include whether the term 'reckless' should be negligence or gross negligence; whether the definition of 'recreational services' is broad enough; whether insurance claims can be capped; whether consumers can be held liable for their own reckless or negligent behaviour; and the matter of waiving the rights of children.

With respect to the issue of whether the definition of 'recreational services' is broad enough, I note that it is broader than the previous definition in the Recreational Services (Limitation of Liability) Act 2002. The capping of claimable amounts, I think, is probably a very problematic area. In some ways, I think it is fair to say that the crisis that led to all of this was not a result of the behaviour of recreational services providers but related to global events—mostly 11 September—which led to a great deal of fear.

We can see similar issues in relation to the current global financial crisis, where there is a flight from risk. That led to a massive increase in insurance premiums, which also impacted on recreational services providers in little old South Australia. That was some time ago. I would also like to make some comments in relation to warranties and conditions, which are included in an extensive section of the bill before us. It appears in new division 2A, which is section 74A and following.

I would also like to place on the record my thanks to the minister and her officers for providing honourable members with a briefing within the past two weeks, which I think helped us to clarify some of the matters that were before us. Personally, coming to it cold as the shadow minister has been an interesting process in that my understanding has been evolving almost on a weekly basis as I come to have a better grasp of what some of the principles mean. However, I will defer to my learned colleague, who has a much better understanding than I have.

Warranties and conditions are contained in the commonwealth Trade Practices Act, at common law in the area of negligence, and in the Fair Trading Act. A warranty relates to a service rendered with due care and skill. The bill before us means that due care and skill must be applied in all cases unless, first, it involves an adult who can waive—the test then is recklessness—and specifically children will not be able to waive, so the due care and skill test will still apply. I believe the minister stated in the briefing that it would be business as usual in that there is no change to the current situation as waivers are unable to be obtained by anyone, adults or children, and a specific clause (74I(2)(b)) is contained within the bill which reflects the common law position, providing that these waivers will apply only if the consumer and any third party consumer are of full age and legal capacity— which I think we could call the child waiver clause.

This act specifically excludes waivers from being able to be signed on behalf of children and I flag that, on the advice of the Insurance Council of Australia, we have drafted an amendment which will delete that clause. Its argument was that this is the only jurisdiction that would include that provision. No other state or territory in Australia specifically prohibits the signing of waivers and, therefore, this would create an additional class of consumer and make it more difficult for them to price insurance which, when we come down to it, is the purpose of this law. If we can retain those balances I mentioned at the start of my contribution, while also trying to balance the ability of recreational services providers to obtain insurance, then that is a positive thing. I understand that in terms of liability a provider must be reckless and the injuries must be significant, and a recreational services provider is not liable for risk that can be avoided by the exercise of due care and skill. In her second reading explanation and in the briefing the minister spoke of one-off events.

An example was provided in the second reading explanation that has concerned a number of the recreational services providers. Explanations provided at the briefing referred to a one-off event in the course of a business being considered to be covered by this measure. There was a little confusion about exactly what a one-off event means, so if the minister in her response could refer to that matter on the record that would be appreciated. The matter of the Tour Down Under signing has been referred to by other members in that, if we are to take the advice on face value, waivers, whether for adults or children, are not valid under the current regime, so why the government chose to get people to sign them for that particular event—

The Hon. G.E. Gago: The government didn't get them to sign it.

The Hon. J.M.A. LENSINK: Not the government? Who was it then?

The Hon. G.E. Gago: The organisers.

The Hon. J.M.A. LENSINK: It is seen as part of the umbrella.

The Hon. G.E. Gago: The government doesn't get people to sign waivers.

The Hon. J.M.A. LENSINK: Nevertheless, that was a curiosity that has been noted by honourable members, so I will not dwell on that particular point. There is also, I think, some confusion about what a waiver really means. There have been some emotive arguments that I do not think are helpful to the debate which talk about the rights of parents and attributing waivers to consent forms. All parents know that they sign consent forms for all sorts of things.

One of the examples which is often used is in relation to whether a child may have surgery and so forth. I think it is important to point out that, if a child is undergoing surgery (and, clearly, a responsible parent would not allow their child to undergo unnecessary surgery—it would be taken on professional advice), it would need to be provided with due care and skill; the would be required to operate with due care and skill, and so forth. So, I think there has been some confusion as to whether a waiver is the same as a consent form.

A waiver is saying that the services, whatever they may be, no longer need to be provided with due care and skill, and the definition is 'that of a reasonable person who either had, or ought to have had, possession of all the information at the time of the incident'. I think that is a standard to which we all aspire.

In relation to adults who may choose to sign waivers, injured persons are presumed to be aware of obvious risks unless they can prove that they were actually not aware of them, which I understand to be the principle of that individual taking responsibility for the risk that they have entered into.

Some legal advice has been provided via Sarita Stratton from a lawyer by the name of John Daenke, who has quite an impressive CV. He has provided advice to Sport SA in relation to the current act that we operate under and the proposed sports codes. He is a consultant for Lynch Meyer and has worked in the area of sports law and insurance law. I am very grateful for being provided with this particular brief which I think covers a number of these issues quite well for the lay person.

He states that in providing this advice he is not sure what the insurance industry's opinion is on how this particular bill will assist recreational services providers to obtain insurance. He pretty much states that waivers are not worth the paper they are written on, but sometimes insurers require them anyway for their own risk management purposes, which I think is an important point. He has concerns that not all not-for-profits are covered, which is a matter that relates to the matters that I was talking about in relation to one-off events, in that one of the aspects that the government spoke about in the briefing was that it would apply to not-for-profits and whether they are covered. So, I would appreciate some advice on that from the government.

He states that the matter of waivers is only relevant to what the insurer wants, and even then the recreational services providers should check with their insurer in advance. He refers to the 'significant injury' definition and 'reckless conduct' definition and states that risk management, as a matter, should be looked at. There has also been some opinion circulated from the Australian Lawyers Alliance which thinks that the statute should be repealed entirely, and that we should just go back to the common law system.

That is something that I do not think the parliament would be inclined to do, and it would probably make us unique amongst all the states and territories. I did state that we received advice from the Insurance Council of Australia for which I am very grateful. It stated that the South Australian model is similar to section 32N of the Fair Trading Act and noted that, while the New South Wales and Victorian provisions are quite different, they have similar effect. The council believes that all the states should be harmonised and, therefore, supports most aspects of this bill because it will repeal the Recreational Services Act and bring South Australia pretty much into line with other states with the exception of section 74I(2)(b).

I do not think that there is a lot more to add, except that we will examine any amendments that have been tabled, but I think that, in principle, we will not support any amendments that either add additional red tape or unnecessary provisions to the act or that change the nature of this piece of legislation. With those comments, I indicate that we will be supporting the second reading of this bill, and I look forward to the committee stage.